TH International Reports Q2 Revenue Drop and Announces Turnaround Strategy
TH International (NASDAQ: THCH) reported a significant revenue drop for the second quarter, with total revenue falling by 21.7% year-over-year to RMB207.4 million. System sales also declined by 15.1%, and same-store sales dropped 17.8%. The company attributed these declines partly to reduced subsidies from delivery platforms as well as lower marketing spending. New CEO John Chen outlined a turnaround strategy focused on product innovation, stronger marketing efforts, improved customer experience, and store economics optimization. As part of this plan, the company is closing underperforming locations while selectively expanding in high-traffic areas within top-tier cities. The CFO noted that digital orders now represent 91.8% of total orders. TH International also announced a $15.8 million convertible-note financing to support product development and expansion strategies. Despite cost reductions, store contribution margins declined from 9.6% to 5.7%. However, the company's loyalty program saw strong growth with over 37.1 million registered members as of June 30.
Topics: ceo_turnaround_strategy liquidity_management revenue_decline same-store_sales_drop store_contribution_margin